Moral versus pragmatic legitimacy and corporate anti-bribery disclosure: evidence from Australia

Muhammad Azizul Islam, Barry J. Cooper, Shamima Haque, Michael John Jones

    Research output: Contribution to journalArticlepeer-review

    13 Citations (Scopus)
    173 Downloads (Pure)

    Abstract

    This study examines how the notions of moral and pragmatic legitimacy explain the role of the Australian Stock Exchange (ASX) corporate governance guidelines on anti-bribery disclosure practices by Australian companies. In particular, by focusing on the largest 100 ASX-listed companies between 2001 and 2011, we aim to explore how the competing notions of pragmatic and moral legitimacy explain anti-bribery disclosure practices and how, during moments of crisis, managers, via anti-bribery disclosures, create a deficit of moral legitimacy in pursuing pragmatic legitimacy. This paper finds that generally anti-bribery disclosures respond to the ASX corporate governance disclosure guidelines–the norms that the broader community expects to be in place for businesses to be socially and ethically accountable. In particular, we find that when responding to the disclosure guidelines, managers are inclined to avoid disclosing actual incidents of bribery that have already been reported by the news media, consistent with avoiding possible financial penalties and protecting managerial and shareholders’ interests. Such a corporate response is a compromise between maintaining moral legitimacy and gaining pragmatic legitimacy. The lack of corporate response to incidents of bribery, in turn creates a deficit in moral legitimacy.

    Original languageEnglish
    Pages (from-to)30-56
    Number of pages27
    JournalAccounting Forum
    Volume46
    Issue number1
    Early online date1 Jul 2021
    DOIs
    Publication statusPublished - 2022

    Keywords

    • Anti-bribery disclosure
    • Australia bribery
    • moral legitimacy
    • pragmatic legitimacy

    ASJC Scopus subject areas

    • Accounting
    • Finance

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